Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified PACCAR as such a stock due to the following factors:
- PCAR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $156.2 million.
- PCAR has traded 860,681 shares today.
- PCAR is trading at 2.03 times the normal volume for the stock at this time of day.
- PCAR crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in PCAR with the Ticky from Trade-Ideas. See the FREE profile for PCAR NOW at Trade-Ideas
More details on PCAR:
PACCAR Inc, together with its subsidiaries, designs, manufactures, and distributes light, medium, and heavy-duty trucks and related aftermarket parts worldwide. It operates through three segments: Truck, Parts, and Financial Services. The stock currently has a dividend yield of 1.4%. PCAR has a PE ratio of 17.6. Currently there are 5 analysts that rate PACCAR a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for PACCAR has been 1.7 million shares per day over the past 30 days. PACCAR has a market cap of $21.8 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.89 and a short float of 3% with 4.23 days to cover. Shares are up 3.8% year-to-date as of the close of trading on Monday.
rates PACCAR as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- PCAR's revenue growth has slightly outpaced the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PACCAR INC has improved earnings per share by 9.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PACCAR INC increased its bottom line by earning $3.30 versus $3.12 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $3.30).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Machinery industry average. The net income increased by 9.5% when compared to the same quarter one year prior, going from $291.60 million to $319.20 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, PACCAR INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full PACCAR Ratings Report.